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Claims Related To Canada, USA, Japan GDP Contraction More Than India Are Misleading

A Twitter user shared the GDP contraction figures of five countries for the first financial quarter from April-June 2020. It claims that the Gross Domestic Product (GDP) of Canada (-38.7%), Japan (-27.8%), and the United States (-32.9%) have contracted more than India (-23.9%). 

Using the handle @ProNaMoSeva the user further states that car sales are up by 20% YoY for August. The tweet reads:

#GDPTruth 

GDP contraction worldwide in Q1

•Canada -38.7%

•USA  -32.9 %

•Japan -27.8%

•India -23.9%

•UK     -20.4%

Good News on  Indian Economy. Car Sales up by 20% YoY for August..

This is Huge.. 

Forget 23% contraction , that was first Quarter. This is Latest news”

Other social media users have shared this claim as well. 

IndiaToday in its special show News Unlocked With Rajdeep Sardesai aired an infographic, which shows the economy of the United States as represented by its GDP, contracted by 32.9%. This was worse than India’s contraction of 23.9% and the five other countries mentioned. 

GDP discussion on India Today's New Unlocked show
GDP discussion on India Today’s New Unlocked show

Fact Check/ Verification 

Recently, India reported a 23.9% fall in its GDP for the April-June quarter (Q1)—the worst quarterly contraction on record. Around the same time, news on the GDP of other major economies of the world was also reported. 

It was around this time that various social media users claimed that the GDP of Canada, United States, and Japan contracted more than India’s. 

First, let’s note that the contraction or growth of the United States’ GDP is calculated differently than India’s. Therefore, the comparison of GDPs of the two countries in the claim is wrong. 

Economic commentator Vivek Kaul in a recent blog post explained that “the Indian comparison is a year on year one and not a comparison with the previous quarter. The US comparison is a quarter on quarter comparison which is then annualised.” 

Vivek Kaul's take on India & US economy contraction
Vivek Kaul’s take on India & US economy contraction

He further states, “If the US were to report the GDP growth/contraction in the same way as India, its GDP during April to June 2020 contracted by 9.1% in comparison to the GDP between April to June 2019. The Indian economy contracted by 23.9% during the same period. That’s the right comparison.”

The United States Bureau of Economic Analysis (BEA) explains why it publishes per cent changes in quarterly series at annual rates here. Therefore, as per BEA’s second estimate released on 27 August, the quarterly non-annualised contraction of the United States is at 9.1%. 

Here’s another explainer on the two US GDP figures doing its rounds on social media. 

GDP Comparison To Other Countries

If we’re to compare economic growth or contraction as represented by the GDP’s of Canada, Japan, and the United Kingdom (other countries mentioned in the claim) to India, we would use the following year-on-year data in the same time period:

Canada: -13%

Japan: -10% 

United Kingdom: -21.7%

LiveMint reported on India’s internationally comparable quarter-on-quarter GDP figures by IMF chief economist Gita Gopinath. You can read more about it here.

Regarding the second part of the claim which states that India’s car sales have gone up, you can read more about it here and here

Conclusion 

Our research makes it clear that the claim which states the GDP of Canada, Japan, and the United States has contracted more than India’s is misleading. The figures do not represent a year on year calculation of the country’s GDP, which is how the Indian economic growth or contraction is calculated. 

Result: Misleading 

Our Sources

India’s Ministry of Statistics & Programme Implementation

Economic Commentator Vivek Kaul

United States Bureau of Economic Analysis

United States Bureau of Economic Analysis’s Second Estimate

New York Times report

CIEC data

Office for National Statistics, UK 


If you would like us to fact check a claim, give feedback or lodge a complaint, WhatsApp us at 9999499044 or email us at checkthis@newschecker.in. You can also visit the Contact Us page and fill the form.

Nikita Vashisth
Nikita Vashisth
Nikita is a writer and editor for English fact-checking. She also leads projects to understand the misinformation and fake-news ecosystem—with an emphasis on data and psychology. Previously, she has worked with IndiaSpend, CNN-News18 and written for Citizen Matters and Mongabay-India on the environment, health, and politics. She’s a postgraduate of the Computational Journalism program at Cardiff University, Wales.

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